Asset manager profiles

Transcription

1 SECTION 1 Asset manager profiles John Hancock USA All financial obligations under the group annuity contract are the sole obligation of John Hancock Life Insurance Company (U.S.A.). John Hancock is a division of Manulife Financial Corporation, a leading international financial services group that helps people achieve their dreams and aspirations by putting customers needs first and providing the right advice and solutions. We operate as John Hancock in the United States, and Manulife elsewhere. We provide financial advice, insurance and wealth and asset management solutions for individuals, groups and institutions. Assets under management and administration by Manulife and its subsidiaries were over CAD $1.1 trillion (US$863 billion) as of September 30, Manulife Financial Corporation trades as MFC on the TSX, NYSE, and PSE, and under 95 on the SEHK. Additional information about Manulife can be found at manulife.com. One of the largest life insurers in the United States, John Hancock supports approximately 10 million Americans with a broad range of financial products, including life insurance, annuities, investments, 01(k) plans, college savings plans, and certain forms of business insurance. We also offer advice through Signator, a network of independent financial advisors. Additional information about John Hancock may be found at johnhancock.com. Wellington Management Company, LLP Wellington Management serves as an investment advisor to over 2,100 institutions located in over 50 countries. We are not brokers, lenders or underwriters. Our expertise is investments - from global equities and fixed income to currencies and commodities. We like to describe ourselves as a collection of teams that create solutions designed to respond to specific client needs. Our most distinctive strength is our proprietary, independent research, which is shared across all areas of the organization and used only for managing our clients' portfolios. Wellington Management Company, LLP is a private partnership. We exist solely to meet the needs of our clients. An independent structure and collegial culture are two of the main reasons investment professionals join Wellington Management - and stay for their entire careers. 1

2 SECTION 2 Risk disclosures Allocating assets to only one or a small number of the investment options (other than the Target Date Lifecycle or Target Risk Lifestyle options) should not be considered a balanced investment program. In particular, allocating assets to a small number of options concentrated in particular business or market sectors will subject your account to increased risk and volatility. Examples of business or market sectors where this risk may be particularly high include: a) technology-related businesses, including Internet-related businesses, b) small-cap securities and c) foreign securities. John Hancock does not provide advice regarding appropriate investment allocations. Risks Applicable to All Funds Merger and Replacement Transition Risk for Sub-Account. Once the plan fiduciary has been notified and unless they elect otherwise, in the case of Fund mergers and replacements, the affected Funds that are being merged or replaced may implement the redemption of your interest by payment in cash or by distributing assets in kind. In either case, the redemption of your interest by the affected Fund, as well as the investment of the redemption proceeds by the "new" Fund, may result in transaction costs to the Funds because the affected Funds may find it necessary to sell securities and the "new" Funds will find it necessary to invest the redemption proceeds. Also, the redemption and reinvestment processes, including any transition period that may be involved in completing such mergers and replacements, could be subject to market gains or losses, including those from currency exchange rates. The transaction costs and potential market gains or losses could have an impact on the value of your investment in the affected Fund and in the "new" Fund, and such market gains or losses could also have an impact on the value of any existing investment that you or other investors may have in the "new" Fund. Although there can be no assurances that all risks can be eliminated, John Hancock will use its best efforts to manage and minimize such risks and costs. Where the redemption of your interest is implemented through a distribution of assets in kind, the effective date of the merger or replacement may vary from the target date due to the transition period, commencing either before or after the date that is required to liquidate or transition the assets for investment in the "new" Fund. Risk of increase in expenses for Sub-Account. Your actual costs of investing in the fund may be higher than the expenses shown in "Annual fund operating expenses" for a variety of reasons. For example, expense ratios may be higher than those shown if a fee limitation is changed or terminated or if average net assets decrease. Net assets are more likely to decrease and fund expense ratios are more likely to increase when markets are volatile. Risk Disclosures: Additional Risks Equity Securities The value of equity securities, which include common, preferred, and convertible preferred stocks, will fluctuate based on changes in their issuers financial conditions, as well as overall market and economic conditions, and can decline in the event of deteriorating issuer, market, or economic conditions. markets are relatively small, and securities issued in less-developed countries face the risks of nationalization, expropriation or confiscatory taxation, and adverse changes in investment or exchange control regulations, including suspension of the ability to transfer currency from a country. Economic, political, social, or diplomatic developments can also negatively impact performance. High Portfolio Turnover Active trading may create high portfolio turnover, or a turnover of 100% or more, resulting in increased transaction costs. These higher costs may have an adverse impact on performance and generate shortterm capital gains, creating potential tax liability even if an investor does not sell any shares during the year. Industry and Sector Investing Concentrating assets in a particular industry, sector of the economy, or markets may increase volatility because the investment will be more susceptible to the impact of market, economic, regulatory, and other factors affecting that industry or sector compared with a more broadly diversified asset allocation. Loss of Money Because the investment s market value may fluctuate up and down, an investor may lose money, including part of the principal, when he or she buys or sells the investment. Management Performance is subject to the risk that the advisor s asset allocation and investment strategies do not perform as expected, which may cause the portfolio to underperform its benchmark, other investments with similar objectives, or the market in general. The investment is subject to the risk of loss of income and capital invested, and the advisor does not guarantee its value, performance, or any particular rate of return. Market/Market Volatility The market value of the portfolio s securities may fall rapidly or unpredictably because of changing economic, political, or market conditions, which may reduce the value of the portfolio. Mid-Cap Concentrating assets in mid-capitalization stocks may subject the portfolio to the risk that those stocks underperform other capitalizations or the market as a whole. Mid-cap companies may be subject to increased liquidity risk compared with large-cap companies and may experience greater price volatility than do those securities because of more-limited product lines or financial resources, among other factors. Not FDIC Insured The investment is not a deposit or obligation of, or guaranteed or endorsed by, any bank and is not insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other U.S. governmental agency. Other The investment s performance may be impacted by its concentration in a certain type of security, adherence to a particular investing strategy, or a unique aspect of its structure and costs. Restricted/Illiquid Securities Restricted and illiquid securities may fall in price because of an inability to sell the securities when desired. Investing in restricted securities may subject the portfolio to higher costs and liquidity risk. Foreign Securities Investments in foreign securities may be subject to increased volatility as the value of these securities can change more rapidly and extremely than can the value of U.S. securities. Foreign securities are subject to increased issuer risk because foreign issuers may not experience the same degree of regulation as U.S. issuers do and are held to different reporting, accounting, and auditing standards. In addition, foreign securities are subject to increased costs because there are generally higher commission rates on transactions, transfer taxes, higher custodial costs, and the potential for foreign tax charges on dividend and interest payments. Many foreign 2

3 Sub-Account Details Risk/Return Category 1A Aggressive Growth Low High Asset Class/Investment Style Domestic Equity Value Blend Growth Performance ** Returns (as of ) Fund Large Medium Small Index Peer Group 1 year -0.7% -.75% -6.59% 3 year 9.00% 8.59% 7.29% 5 year 7.68% 7.2% 5.6% 10 year 13.52% 15.12% 13.16% Expense Ratio (as of ) **** Expense Ratio **** 0.53% Cost Per $1,000 $5.30 Mid Cap Stock Fund 23,1,90 Investing solely in John Hancock Funds II - Mid Cap Stock Fund (Class 1) Sub-advised by Wellington Management Company, LLP Fund Highlights Ticker Symbol + : JIMSX Investment Objective and Policies Seeks to provide long-term growth of capital and capital appreciation. Why Consider this Fund You want potential long-term growth of capital and can accept the relatively high levels of risk and volatility that typically accompany investments in mid-cap stocks You want exposure to mid-cap growth stocks that may offer superior growth characteristics versus large-cap growth stocks with lower volatility than small-cap growth stocks Holdings, Weightings and Allocations of the underlying fund Sub-Account Inception Date: July 30, 1999 Underlying fund Inception Date: August 2, 1999 See important notes. **The performance data presented represents past performance. Past performance is no guarantee of future results and current performance may be lower or higher than the performance quoted. An investment in a sub-account will fluctuate in value to reflect the value of the underlying portfolio and, when redeemed, may be worth more or less than original cost. Performance does not reflect any applicable contract-level or certain participant-level charges, or any redemption fees imposed by an underlying fund company. These charges, if included, would otherwise reduce the total return for a participant s account. Performance information current to the most recent month-end is available on our website. Performance data for a sub-account for any period prior to the date introduced is shown in bold and is hypothetical based on the performance of the underlying fund. The total revenue John Hancock receives on this Fund is higher than those advised or sub-advised exclusively by unaffiliated entities. John Hancock and its affiliates provide exclusive advisory and sub-advisory services for the underlying fund. For these services, John Hancock and its affiliates receive additional fees which are included in the underlying fund expense ratio (i.e. Fund Expense Ratio or FER). The Index is Russell Mid Cap Growth. i1 The peer group is Mid-Cap Growth. p18 Principal risks include:not FDIC insured, foreign securities, loss of money, restricted/illiquid securities, risk of increase expenses, management, merger and replacement, equity securities, industry and sector investing, high portfolio turnover, market/market volatility, midcap and other. For more details, see Risk Disclosures section of this booklet Top Holdings (as of ) Exact Sciences Corp 3.9% Workday Inc Class A 3.5% Guidewire Software Inc 3.0% Spotify Technology SA 2.9% ServiceNow Inc 2.9% CoStar Group Inc 2.8% Wayfair Inc Class A 2.8% Monster Beverage Corp 2.% TD Ameritrade Holding Corp 2.% DexCom Inc 2.% Totals 29.0% of assets Asset Allocation (as of ) US Stock 80.9% Cash 10.0% Preferred 5.0% Non US Stock 2.7% Other 1.% Key Statistics (as of unless noted ) Number of Holdings: 83 Sharpe Ratio: 0.52 Beta: 1.19 (Russell Mid Cap Growth TR USD) R²: (Russell Mid Cap Growth TR USD) Turnover (annualized) : Net Assets: $1. billion Underlying fund expense ratios: Gross * 0.92% Net * 0.92% Market Cap (millions): Top Country Holdings (as of ) United States 80.9% Canada 1.0% Belgium 0.9% Philippines 0.8% Top Sector Weightings (as of ) Technology 29.3% Healthcare 19.9% Consumer Cyclical 1.% Industrials 6.2% Consumer Defensive 5.% Real Estate 2.8% Financial Services 2.% Basic Materials 1.6% Energy 1.% Morningstar Information *** (as of ) Overall Morningstar Rating : 222 Overall # of Funds in Category: 52 Morningstar Category 6A : Mid-Cap Growth No. of funds: 3yr 52; 5yr 89; 10yr 31 The Overall Morningstar Rating for the underlying fund is derived from a weighted average of the performance figures associated with its three-, five- and 10-year (if applicable) Morningstar Rating metrics. The rating formula most heavily weights the three year rating, using the following calculation: 100% three-year rating for months of total returns, 60% five-year rating/0% three-year rating for months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. Rating does not include the effects of sales charges, loads, and redemption fees. Past performance does not guarantee future results. Ratings are as follows: 3yr=3; 5yr=3; 10yr=3. See Important Notes for the rating criteria. * The Net expense ratio shown is for the underlying fund and reflects any fee waivers or expense reimbursements and is subject to change. Please refer to the underlying prospectus or offering documents for additional information. A GT-P259-MCS-STP Printed 02/

4 Important notes Please call to obtain the Fund Sheet for the group annuity investment option sub-accounts and/or to obtain a prospectus (or Offering Memorandum/Trust Document) for the sub-accounts' underlying fund, that are available on request. The prospectuses (or Offering Memorandum/Trust Documents) for the sub-accounts underlying funds contain complete details on investment objectives, risks, fees, charges and expenses as well as other information about the underlying funds which should be carefully considered before investing. Fees and expenses are only one of several factors that you should consider when making investment decisions. The cumulative effect of fees and expenses can substantially reduce the growth of your retirement account. You can visit the Employee Benefit Security Administration's Web site for an example demonstrating the long-term effect of fees and expenses. Contributions under a group annuity contract issued by John Hancock Life Insurance Company (U.S.A.) (John Hancock USA) are allocated to investment options which: (a) invest solely in shares of an underlying mutual fund, collective trust, or ETF; (b) invest in a combination of these; or (c) are Guaranteed Interest Accounts and which will be held in the John Hancock USA general account. For more information on a particular investment option, please refer to John Hancock USA's Fund sheets, available through the Web site at Allocating assets to only one or a small number of the investment options generally should not be considered a balanced investment strategy. In particular, allocating assets to a small number of options concentrated in particular business or market sectors will subject your account or contract to increased risk and volatility. Examples of business or market sectors where this risk may be particularly high include: a) technology-related businesses, b) small-cap securities and c) foreign securities. John Hancock USA does not provide advice regarding appropriate investment allocations. Contact your financial representative for more details. + When contributions are allocated to Funds under your employer's group annuity contract with John Hancock, they will be held in a sub-account (also referred to as "Fund"), which invests in shares of the specified underlying mutual fund, collective trust, ETF or a combination of these. The ticker symbols shown are for the underlying mutual fund, collective trusts or ETFs in which sub-accounts are invested. The ticker symbols do not directly apply to the John Hancock sub-account and therefore any public information accessed using these symbols will not reflect the unit value of the subaccount, nor will such information reflect sub-account, contract-level or participant-level charges under your plan's group annuity contract. Information Concerning John Hancock s Short-Term Trading Policy The group annuity contract is not designed for short-term trading. The effect of short-term trading may disrupt or be potentially disruptive to the management of the fund underlying an investment option and may thereby adversely impact the underlying fund s performance, either by impacting fund management practices or by increasing fund transaction costs. These impacts are absorbed by other fund investors, including retirement plan participants. For the protection of the participants, account changes are subject to the following short-term trading guidelines when exchanging investment options under your company's qualified retirement plan account with John Hancock. Requests may be cancelled if not within our guidelines. Participants are allowed amaximum of two exchanges per calendar month. Anexchange is defined as the full rebalance of a participant s account, or single or multiple fund-to-fund transfers that involve multiple investment options (also referred to as inter-account transfers ) on one day, and may be made over the Web, or with a client account representative. The guidelinesdo notapply to regular allocations, loans, or withdrawals. In addition, on an ongoing basis, participant account activity is reviewed for trading activity that, though within the monthly exchange limit, could be detrimental to an underlying fund and/or contrary to its exchange policies, as described in the fund s prospectus. As a result of this review, or if requested by a fund company, additional restrictions may be imposed on a participant's retirement account, including but not limited to: Applying redemption fees and/or trade restrictions as requested by the underlying fund manager. Such trade restrictions may be more restrictive than the above guidelines Restricting the number of exchanges made during a defined period Restricting the dollar amount of exchange Restricting the method used to submit exchanges (e.g., requiring exchange requests to be submitted in writing via U.S. mail) Restricting exchanges into and out of certain investment options Participants can read about the short-term trading policy at (URL for TIP) or (URL for SIP) under the "modify your account - change account" feature. Redemption fees or market value adjustments associated with exchanges from particular investment options are described on applicable fund sheets, which are available online. For more information or to order prospectuses for the underlying investments, call (number for TIP) or (number for SIP) and speak to a client account representative. ±Weightings - Applicable to only the Target Date (Lifecycle) and Target Risk (Lifestyle) Portfolios Each Target Risk (Lifestyle)/Target Date (Lifecycle) Portfolio has a target percentage allocation designed to meet the investment objectives of a corresponding investment orientation. Allocation percentages may vary or be adjusted due to market or economic conditions or other reasons as set out in the prospectus. Due to abnormal market conditions or redemption activity the fund may temporarily invest in cash and cash equivalents. The underlying mutual fund, collective trust, or ETF has the right to restrict trade activity without prior notice if a participant's trading is determined to be in excess of their exchange policy, as stated in the prospectus or offering memorandum. The information shown is based on the most recent available information for the underlying mutual fund, collective trust, or ETF (collectively referred to as underlying fund) as of the date of printing and is subject to change. Listed holdings do not represent all of the holdings in the underlying fund. ****Expense Ratio (ER), also known as the Annual Investment Charge (AIC) This material shows expenses for a specific unit class for investment options available under a John Hancock USA group annuity contract. The Expense Ratio (ER) shown for all sub-accounts (also referred to as "Funds") available to your Plan under the Contract (with the exception of the Fixed Income Fund) includes indirect compensation received by John Hancock USA in the form of Rule 12b-1, sub-transfer agency, management or other fees from the underlying funds (based on expense ratios reported in the most recent prospectuses available as of the date of printing). The amount received by John Hancock USA from the underlying funds will vary from fund to fund ranging from 0.5% to 0.519% of your Plan s assets invested in the Fund. John Hancock applies the indirect compensation received from the underlying funds and/or their affiliates as follows. First, as directed by the Plan trustee, John Hancock USA applies an amount equal to 0.10% of your Plan s assets invested in the Fund to pay for the fee charged by AON Hewitt, the Plan's designated third party administrator, for the services the latter provides to the Plan. Second, John Hancock USA retains an amount equal to 0.05% of your Plan s assets invested in the Fund for recordkeeping services provided under your Contract. Third, the remainder of any indirect compensation received by John Hancock USA from the funds is credited back to your Plan s investment in the Fund via a negative Administrative Maintenance Charge (AMC). John Hancock USA receives no direct compensation from the Plan for the recordkeeping services it provides under your Contract. The underlying fund

5 Important notes CONTINUED expense is determined by the underlying fund company and may be increased or decreased at any time to reflect changes in the expenses of the underlying fund or other factors. In addition, some fund companies charge exchange or redemption fees for mutual fund shares held for less than a certain period of time. Any such charges would be deducted from the value of a participant's account. The ER applies daily at a rate equivalent to the annual rate shown, and may vary to reflect changes in the expenses of an underlying fund and other factors. For the Fixed Income Fund, the ER ranges from 0.5% to 0.55% of your Plan s assets invested in the Fund, depending on the allocation of assets among the underlying funds and annuity contracts. Of that amount, John Hancock USA applies an amount equal to 0.10% of your Plan s assets invested in the Fixed Income Fund to pay for the fee charged by AON Hewittt, the Plan's designated third party administrator, for the services the latter provides to the Plan. The remainder of the ER for the Fixed Income Fund consists of the expenses of the underlying funds and annuity contracts that make up the Fixed Income Fund. In some cases, John Hancock USA is the investment manager of one or more of the underlying funds or annuity contracts; in those cases, John Hancock USA s investment management fee is part of the expenses of the underlying fund or annuity contract. The expenses of the underlying fund or annuity contract may also include fees (also known as wrap fees ) paid to third party stability providers or other benefit responsive contract issuers that provide guarantees to the underlying fund or annuity contract. For Expense Ratio information current as of the most recent quarter end, please refer to the monthly "Returns and Fees" listing available from John Hancock USA upon request. For more information, please contact your financial representative. **Performance of the sub-account The performance data for a sub-account for any period prior to the sub-account Inception Date is hypothetical based on the performance of the underlying portfolio. + A "class" represents a pre-determined level of the Sales & Service Fee that is applied to all investment options selected in the Contract. All other performance data is actual (except as otherwise indicated). Returns for any period greater than one year are annualized. Performance data reflects changes in the prices of a sub-account's investments (including the shares of an underlying fund), reinvestment of dividends and capital gains and deductions for the Expense Ratio (ER), also known as the Annual Investment Charge (AIC). Performance does not reflect any applicable contract-level or certain participant-level charges, fees for guaranteed benefits if elected by participant under the group annuity contract or redemption fees imposed by the underlying Portfolio. These charges, if included, would otherwise reduce the total return for a participant's account. All performance calculations shown have been prepared solely by John Hancock USA. The underlying fund company has not reviewed the sub-account s performance. Morningstar Category: 2019 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. ***Morningstar Portfolio Ratings All Morningstar data is 2019 by Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. For each underlying fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in the underlying fund s monthly performance (does not include the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. Exchange traded funds and open-ended mutual funds are considered a single population for comparative purposes. Funds with scores in the top 10% of each category receive 5 stars (highest); the next 22.5%, stars (above average); the next 35%, 3 stars (average); the next 22.5%, 2 stars (below average); and the bottom 10%, 1 star (lowest). Morningstar ratings are applicable to the underlying only and reflect historical risk-adjusted performance as of the most recent calendar quarter-end. Although gathered from reliable sources, the information is not represented or warranted by Morningstar to be accurate, correct, complete or timely. 23. Account balance reported may include assets transferred from another Fund, which was permanently closed on or about October 29, Consult your John Hancock representative for more information. 1. Account balance reported may include assets transferred from another Fund, which was permanently closed on or about October 27, Contact your John Hancock representative for more information. 90. Account balance reported may include assets transferred from another Fund, which was permanently closed on or about April 28, Contact your John Hancock representative for more information Index Performance: With respect to the Funds that display an index performance. Index performance shown is for a broad-based securities market index. Indexes are unmanaged and cannot be invested in directly. Index returns were prepared using Morningstar Direct. The performance of an Index does not include any portfolio or insurancerelated charges. If these charges were reflected, performance would be lower. Past performance is not a guarantee of future results. i1. Russell Mid Cap Growth Index: Offers investors access to the mid-cap growth segment of the U.S. equity universe and is constructed to provide a comprehensive and unbiased barometer of the mid-cap growth market Peer Group Performance: With respect to the Funds that display a Peer Group Performance. Source: Morningstar Direct for Mutual Funds, as of the most recent month end. Morningstar data is 2019 by Morningstar, Inc. All rights reserved. Although gathered from reliable sources, the information is not represented or warranted by Morningstar to be accurate, correct, complete or timely. Peer groups are unmanaged and cannot be invested in directly. p18. Mid-Cap Growth: Some mid-cap growth portfolios invest in stocks of all sizes, thus leading to a mid-cap profile, but others focus on midsize companies. Mid-cap growth portfolios target U.S. firms that are projected to grow faster than other mid-cap stocks, therefore commanding relatively higher prices. The U.S. midcap range for market capitalization typically falls between $1 billion-$8 billion and represents 20% of the total capitalization of the U.S. equity market. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). Key Statistics The Turnover Ratio shown is based on the most recent available financial statements for the underlying mutual fund, collective trust, or ETF as of the date of printing and is subject to change. Fund availability subject to regulatory approval and may vary from state to state. The availability of products, Funds and contract features may be subject to Broker-Dealer Firm approval, State approval, Broker Licensing requirements, tax law requirements, or other contract-related requirements. From time to time, changes are made to Funds, and the availability of these changes may be subject to State approvals or other compliance requirements. Please confirm with your local John Hancock Representative if you have any questions about product, Fund or contract feature availability. 5